Office of the State Comptroller
Retirement Services Division

SEBAC 2011 ARP TO SERS HYBRID PLAN TRANSFER

IMPORTANT PROGRAM PARTICIPATION INFORMATION

Who is Eligible to Participate:

All current, active ARP participants who were employed prior to July 1, 2011.

Any ARP member who retired on or after January 1, 2009 and before July 1, 2011.

Time Period for Election:

The "window" for ARP participants choosing to transfer from ARP to the SERS Hybrid Plan will be open until 90 days following a ruling by the Internal Revenue Service (IRS) on the SEBAC ARP Grievance (SAG) Award. Information concerning the SAG Award is available on the Office of the State Comptroller's (OSC) website, www.osc.ct.gov.

Following the receipt of information from the IRS, the OSC Retirement Services Division will notify state higher education agencies and affected ARP participants of any action necessary. ARP participants should be aware that the cost of their transfer will be determined at the time they apply and will likely be greater if they apply in the future.

Prior Service Purchase:

Eligible employees will receive credit for all prior state service during which they participated in ARP provided they pay the full actuarial cost to the SERS Hybrid Plan for such service. Any period(s) of leave of absence without pay which is creditable under SERS Hybrid Plan provisions will be included in the cost.

Whether or not prior SERS service is creditable under this program is currently under review by the State Employees Retirement Commission's legal counsel.

The purchase cost must be paid first from the employee's ARP monies, with the exception of any funds in the TIAA Traditional Fixed Account also known as "encumbered funds". Participating employees have the option to use or not use their encumbered funds to pay the purchase cost. If an employee chooses to use their encumbered funds, payments will be made from those funds over a multiple year period as required for withdrawal of those funds. However, since these payments will be made over an extended period of time, a discount (interest) rate will be applied to those funds. Click here for the rate chart for TIAA-CREF encumbered funds and examples of how the encumbered funds discount rate will affect your purchase cost and payments.

Employees who do not have sufficient funds in the ARP to pay the full cost of their purchase of prior service may use monies from their Section 457 deferred compensation plan or Section 403(b) retirement savings plan. All ARP funds with the exception of encumbered funds only must be exhausted before using Section 457 or 403(b) monies.

Once an ARP participant has elected to and become a SERS Hybrid Plan member they may apply to purchase service credit in that plan for any miscellaneous service, such as prior military service, for which they are eligible under the provisions of the SERS Hybrid Plan.

Clarification of Plan Membership:

Employees who choose to transfer to the SERS Hybrid Plan all become members of the same retirement plan.

The basic retirement plan provisions are the same for all Hybrid Plan members. Certain provisions of the Hybrid Plan are however based on the member's date of employment or participation in the ARP. The differences are mainly with respect to the amount and type of employee contribution required and the age and service retirement eligibility requirements. The benefit calculation formula is the same for all members.

For the purposes of employees who are eligible to participate in this transfer program, the Tier II/IIA counseling workshop and benefit estimator may be used to provide estimated benefits available under this program.

Final Note:

This election is irrevocable.This means that, once this form is received by the Retirement Services Division, this election cannot be revoked for any reason except that an ARP participant whose actual purchase cost is determined to be more than 5% greater than the estimated purchase cost provided with their application will have 30 days following the date of their purchase invoice in which to decline participation in this opportunity and revert their membership back to the ARP. Employees should carefully review all of the information provided through this website before making a decision to participate in this program.

ARP participants who elect to transfer to the SERS Hybrid Plan will not be eligible to participate in the SAG Award should information be received from the IRS which results in the subsequent administration of that award.

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